On the left in the photograph is Mervyn King, governor of the Bank of England and to his right is Charles Bean, his cheery deputy.
Mr Bean is suggesting that 'older households', such as mine, could afford to suffer in this economic climate because we have benefited from previous property price rises. He assumes everyone moves house to make money rather than for location/ domestic reasons.
On Channel Four News on Monday night he said that savers had done well from higher rates in the past and we should 'not expect' to live off interest. I don't live off interest. My miniscule savings interest has fallen from more than 2.8% to 0.23% last month. The interest I received this last year didn't pay for a haircut.
Charles Bean assumes that all 'older households' will benefit from the higher house prices yet he really has no knowledge of house prices in Scotland. Prices have risen marginally in Edinburgh and Glasgow yet in rural areas have kept reasonably stable yet that doesn't mean if I sold my home I would have money to spend. Moving house is expensive and should I downsize to a 'pensioner home' I doubt if I would have any pocket money to add to the economy. I would make do with the personal effects I presently own so the only people who would profit from my relocation are estate agents and lawyers. Doesn't that say where Mr Bean's allegiance lies?
As for his attempt to persuade me to spent more - I intend to keep the wee bit I have to eat and pay to keep myself warm this winter and for a few winters to come.
Of course Mr Bean's salary would heat a mansion or two. He took a pay rise of 2.5% taking his salary to about £280,000. Enough said.
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One of the disturbing things about our situation is that we are ruled by a pile of people who haven’t the foggiest idea how people like us live.
It would astound them that we don’t go to first nights at the National Theatre or Royal Opera spend weekend with friends in the country, do the social round of Henley, Ascot, Wimbledon, Lords and Glyndebourne. (I recently watched all the Yes Minister dvds: there’s a very good one when Hacker and Sir Humphrey debate this.)
Life is not like that for the vast majority of us. We go to the local cinema, down the pub, to the match and to Tesco. Many don’t even do that. Especially older people.
Many people do not own their own houses. For many who do the value has so decreased in the last few years. And pensioners who saved reasonable sums and invested them for their future now find the interest on their savings to be miniscule and as a result they are broke..... And who’s that down to Mr Bean... Oh yeah bankers.
We might as well be another species to the likes of Mr Bean. Being Scottish and lower middle class is not something these people have the vaguest notion about. What hope is there for us?
I'm concerned that the view of the Bank of England - or at least certain senior personnel - is that the economy does not need re-oriented and can, in fact, continue being led by consumers buying, mostly, foreign-manufactured goods. Is that really the future for Britain? I'm equally concerned that he considers savers to be damaging to the economy by keeping money rather than spending it. Strange times.
There were two 'economists' on Sky News last night who agreed that we were over the worst of the recession and that next year would see 'healthy growth'
They actually have no idea that we are about to enter the final phase of the crash. Total meltdown. The US is $14trillion in debt forecasting $30 trillion. The EU is quietly bailing out Ireland, Spain, Portual. Greece etc with money we don't have. Buying up toxic debt from banks to make their balance sheets look healthy and lending to governments that will never be able to repay. They're also attempting to get out of the debt spiral by using inflation and printing as much money as possible to devalue the currency and so the debt. Gold is going to the stratosphere ( £250 an ounce to £1300 an ounce in 10 years. Forecast at £5,000).
If 'expert' economists have no idea then there is no way things can turn around.
SR. Good post here on Mr Bean etc
http://nbyslog.blogspot.com/2010/09/mr-bean-is-alive-and-well-and-living-in.html
Just to make sure that we end our days in penury the BoE bastards are printing money (QE) like there's no tomorrow. Obviously their deceitful way of reducing the national debt through inflation, without thought for pensioners with fixed incomes.
Do governments ever repay debts, though, RM? I'm sure I've read that we still owe money from WWI - hell, we still owe money from the Napoleonic wars.
Why should the price of gold rocket? What does gold actually do?
Hi Tris, SR, the bottom line is that they just DONT CARE,any of them,they are all right , and that is all that matters.
When will the people of this country stop being fooled, open there eyes, and see what is going on.
We will be back to serfdom in 20 years, wake up and see.
I'm not an economist but I think this is roughly how it works.
Decades ago Manufacturing industry moved from Western Europe and North America to Asia.
This was done because labour costs were far lower there and the investors got more back on the dollar so to speak.
Problem was the consumers there were not being paid enough to buy enough of their own goods to make it work.
This created the dilema of where would the market be.
Well if incomes dwindled in the former manufacturing countries due to unemployment they would not be able to afford the goods either.
However what they ,(the incredibly rich), did was increase the living standard in the former manufacturing nations so they could afford to buy more of the goods.
By methods such as non job creation ,service industries ,higher benefits etc.
Problem now is when you do that how do you ensure that these non productive better off westerners contribute back to the fund so to speak,
simple increase taxation to pay for services owned by the investors ,all be it indirectly whilst at the same time fooling them into thinking they are actually better off because the shiny trinkets are cheaper.
So the money still goes round but from an investors point of view in a more profitable way.
The credit crunch put a spanner in the works as it slowed that circular movement down.
I'm definately not an economist but it's something like that.
We definately need to return to at least an increased manufacturing base again because uor economy is very susceptible to global financial pressures ,not to mention the strategic implications of a manufacturing base.
The Germans kept their base simply by moving up market producing higher quality goods.
We could have done that as we also had brand names that could have done that.
So manufacture cheaply sell to a ready made market ,tax the market heavily ,get the money back.
It's a bubble .
POP.
As I said i'm not an economist it's a hunch.
William.
It's true that govts can take decades to repay debt but the problem this time is that our annual deficit ( how much we must borrow to cover our expenses after using all of our own money through taxation etc )is rising steadily with no prospect in sight of it being able to reverse. This means that our annual debt ( total amount we owe and curently approaching £1.2 trillion with a forecast of £4trillion )will also rise year by year.
Up to 1997 we managed to reduce the deficit to manageable proportions year on year. This is no longer possible because our exports /taxation etc are shrinking year on year. As the truth about bank debts is slowly revealed we will find that the taxpayer backed banks will pull us further into the mire.
Gold is seen as a safe haven in distressed times because unlike paper money you can't just print more to pay your way so reducing it's value. There is a finite amount of gold. You can't eat gold but you can barter with it as it's a commodity trusted worldwide. At the moment it's actually being kept at an artificially low price by secret buying and selling by the IMF etc.
China is getting into gold in a big way by transferring it's weakening dollars into gold. Even Bangladesh has invested heavily in gold in recent months.
The big gold sell off by the gorgon in the 90's was alleged to have been done to reduse the price of gold and so bail out 'friends' who had hedged on gold to fall in value and seen it rising instead threatening them with a wipeout.
£280k a year for what? Where do these people come from. A moron of gargantuan proportions.
Mr Bean by name, Mr Bean by intellect.
Where the f*ck does he think the previous Government was able to borrow all that money from, that they spent?
[Apart from the extra they printed under the euphemism "Quantitative Easing"]
Someone tell him money doesn't grow on trees; it's saved by frugal people 'for a rainy day'.
They're the establishment Tris. They know nothing and have no interest in how we live because they reside in the top 5% of society.
You're right, we are another species.
Very strange times William. Now if he was preaching that we should be buying British I'd understand.
What I've been reading in the past couple of days RM is that the euro is about to burst. Didn't see TV last night.
Many thanks for that link. Excellent it is.
Pensioners were called the 'grey economy' in recent years Sean because, although we had fixed incomes, quite a few of us would spend sensibly. No longer. Most of my friends are holding onto what little they have because, even though its value is reducing daily, at least they have something.
Hi Apogee, of course they don't care. If they did care they would realise just how stupid their assessments are of us hoi polloi.
You've done a good job there Specky. I would agree that encouraging manufacturing is our only way out of this but the government won't reduce business taxation and companies are leaving uk. They are off to countries with better rates.
Don't forget the handsome pension OR. He has a splendid lifestyle I believe on his near £300,000 a year.
The only people who have made anything out of this recession is those with big mortgages Joe. With present interest rates they're getting a good deal. Unfortunately frugal savers are seeing their money depreciate every day.
Get your money into Gold. You won't regret it, I guarantee.
I wouldn't have a clue how to buy and sell gold DL.
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